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Greenback Follows Yields Higher as Markets in Bounceback Mode

FOREX
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  • The greenback trades firmer against all others in the final trading day of the week, gaining on the back of an extension of the recovery in US Treasury yields. The US 10y yield is now north of yesterday's high, and retracing a large part of the post-CPI move lower.
  • As a result, most major pairs are lower, with EUR/USD back below the 1.0850 mark and close to daily lows ahead of the NY crossover. ECB speak has largely stuck to the recent comms strategy, flagging June as the likely first cut, but a less certain outlook beyond the first easing step.
  • Eurozone final CPI data confirmed the broad deceleration seen in the April flash release. Chinese industrial production and retail sales data came in mixed, with IP topping expectations, but retail sales coming up short. The challenges facing the Chinese economy remain a focus for policymakers, with PBOC's Tao on the wires this morning to shed more light on four separate housing market policies - but the headlines failed to trigger any broad risk rally. AUD remains among the poorest performers in G10.
  • Data releases are few and far between Friday, leaving focus on central bank communications. ECB's Vasle, Holzmann & Kazaks are still set to speak, as well as Fed's Waller, Kashkari and Daly.
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  • The greenback trades firmer against all others in the final trading day of the week, gaining on the back of an extension of the recovery in US Treasury yields. The US 10y yield is now north of yesterday's high, and retracing a large part of the post-CPI move lower.
  • As a result, most major pairs are lower, with EUR/USD back below the 1.0850 mark and close to daily lows ahead of the NY crossover. ECB speak has largely stuck to the recent comms strategy, flagging June as the likely first cut, but a less certain outlook beyond the first easing step.
  • Eurozone final CPI data confirmed the broad deceleration seen in the April flash release. Chinese industrial production and retail sales data came in mixed, with IP topping expectations, but retail sales coming up short. The challenges facing the Chinese economy remain a focus for policymakers, with PBOC's Tao on the wires this morning to shed more light on four separate housing market policies - but the headlines failed to trigger any broad risk rally. AUD remains among the poorest performers in G10.
  • Data releases are few and far between Friday, leaving focus on central bank communications. ECB's Vasle, Holzmann & Kazaks are still set to speak, as well as Fed's Waller, Kashkari and Daly.